- Concerns over shipping times and vessel size
- Infrastructure adjustments for US imports
- PetroChina and Vitol Asia key current suppliers
- 2023: 1.67 m MT crude, 18 shipments per month
- 2023 import cost: $ 3.82 b (crude: $ 811 m, refined: $ 3.01 b)
The Ceylon Petroleum Corporation (CPC) is currently assessing the technical feasibility of importing petroleum products from the United States as part of a broader effort to expand supply options in line with emerging trade opportunities between the two countries.
Speaking to The Sunday Morning, CPC Managing Director Dr. Mayura Neththikumarage explained that while Sri Lanka primarily sourced its fuel from the region, the corporation was open to considering US imports if logistical and commercial conditions were viable.
“We have had discussions about this. If the prices are competitive and the supply chain is reliable, we are ready to accept proposals,” he said.
“The main challenge right now is technical – longer shipping lead times, larger vessel sizes, and ensuring our infrastructure can handle those volumes. We are addressing those operational aspects.”
Dr. Neththikumarage noted that while longer shipping times from the US – potentially up to 45 days – required advanced planning compared to regional suppliers, there was an existing route and precedent for US fuel shipments to Asian markets, including Sri Lanka.
“This is not something new to the industry. There are already vessels from the US calling at ports near Sri Lanka,” he added.
Another issue under consideration is the size of the ships used for US deliveries. Larger vessels would be needed to make such imports commercially viable, which would in turn require the necessary infrastructure and logistical adjustments at Sri Lankan ports.
He stressed that the CPC’s objective was to ensure no supplier was disqualified from tenders due to technical constraints and that decisions would ultimately be based on commercial terms.
“We are currently in discussions to resolve these technical matters. I have experience with this in other sectors and there’s an established route for these shipments to reach Asia, including Sri Lanka,” Dr. Neththikumarage added.
The Government is working to reduce its trade deficit with the US by proposing comprehensive trade reforms. These proposals, which include both tariff and non-tariff measures, have been submitted to US officials for review, and Sri Lanka is awaiting a formal response.
Energy, particularly oil and gas, is a key focus of these negotiations, as these imports make up a significant portion of Sri Lanka’s foreign purchases.
The Government has offered US firms opportunities to supply energy products, including liquefied gas, crude oil, and refined fuel, and is encouraging US vendors to explore these prospects.
Sri Lanka has identified energy imports as a key area to address its trade deficit, as energy products represent the largest import item. The Government emphasised the desire for competitive procurement, allowing US firms to compete on a level playing field.
Last week, Deputy Minister of Finance and Planning Harshana Suriyapperuma highlighted that there were significant opportunities for US suppliers to provide competitive pricing in various energy sectors, including gas, oil, refined fuel, and crude oil.
He encouraged US suppliers to engage in discussions with Sri Lanka to explore the possibility of supplying these products, presenting a potential avenue for reducing the trade deficit.
Sri Lanka traditionally imports crude oil and refined products from key international suppliers, with the majority of shipments sourced from the region.
According to CPC statistics, for 2022, the total import cost for crude oil and refined products was estimated at $ 3,333 million, with the crude oil cost at $ 912 million and the refined products cost at $ 2,421 million.
In 2023, the total import cost rose to $ 3,822 million, with $ 811 million for crude oil and $ 3,010 million for refined products. The crude oil import plan specifies that a total of 1,855,000 MT of Murban and other crude oils were required in 2022, with shipments scheduled at 20 shipments per month. In 2023, 1,669,500 MT of similar crude oil was planned for import, with 18 shipments per month.
Traditionally, Sri Lanka imports these petroleum products from established suppliers like PetroChina International (Singapore) Ltd. and Vitol Asia Ltd., Singapore. These companies have been contracted to deliver significant quantities of fuel, including gas oil and gasoline, to meet the country’s needs.
PetroChina International is responsible for providing 11 shipments of gas oil and gasoline, while Vitol Asia handles a comparable number of shipments, covering both gas oil and gasoline deliveries.